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$10 million bill for medical referrals still alive

By Fili Sagapolutele

PAGO PAGO, American Samoa (The Samoa News, April 4, 2012) – The Administration’s $10 million appropriation bill for LBJ Medical Center's off-island medical referral program was approved by the House in its second reading on Thursday.

The bill goes through third and final reading on Monday and is expected to be approved before being forwarded to the Senate, for consideration. The Senate rejected its own version of the $10 million bill this week, which was to be funded by increasing excise taxes on alcohol, beer and tobacco, a hike in business license fees and two new taxes, a $2,000 corporate franchise tax and 4% wage tax.

The House amended its version by deleting the wage tax and reducing the hikes in beer, alcohol and tobacco taxes. For example, the beer and alcohol tax is reduced from the proposed 250% to 240%; cigarettes/tobacco taxes were reduced from 17.5% to 15.5%.

The House reduced the business license fees. For example, beer tavern licenses are reduced from $350 to $100 and alcohol beverage licenses from $535 to $100.

Under franchise tax, the House amended the tax based on the corporation's annual gross sales receipts and revenue. For example, corporations making $250,000 and less pay $200 while companies making $1 million and more pays $2,000.

When the bill and its amendments were presented to the floor for debate, Rep. Larry Sanitoa asked what methodology was used by the House Health/LBJ Hospital Committee and the House Budget and Appropriations Committee to come up with the amendments to the business license fees and excise taxes for beer, alcohol and tobacco.

He noted there is still no clear explanation from the committee as to how much money is expected to be collected from reducing the taxes and fees.

House Health Committee chairman Rep. Pulele’iite Tufele reminded lawmakers that two hearings on this bill were held and the final decision to reduce taxes and fees were based on testimonies by the government and the private sector.

He said the committee took into account concerns of the impact to the private sector and reducing the taxes and fees lightens the burden on the business community. Under the amendments, the committee estimates the government will collect around $2.3 million annually, he added.

Sanitoa reiterated there is still no clear explanation on the methodology used by the committee and the government witnesses, who testified on Tuesday this week also didn’t say what methodology they used. He said the private sector has testified about the impact these hikes in fees and taxes will have on their operations and that the costs will be passed on to consumers.

Additionally, there was no firm commitment from the government that it will be able to collect any of these new proposed taxes, adding that the government is barely able to collect current current excise taxes on beer, alcohol and tobacco.

Pulele’iite said reaching the decision to amend the revenue source of the bill was not easy but no matter the case, it's always that someone will have to come up with money to help the government and the hospital.

Pulele’iite then moved to pass the bill including the amendments, while Sanitoa pleaded with his colleagues to reject the bill, saying that the House can work together in July when the Fono returns for the 4th regular session to find additional money for the hospital.

Rep. Taotasi Archie Soliai said he had asked earlier for the committee to provide a breakdown on how much is to be collected from each of the revenue sources for the bill, now that it’s amended but still no firm answer or explanation.

He also said that he still has some serious concerns with the ability of the government to collect any of these new proposed fees and taxes because ASG is still having problems collecting current taxes, which is what ASG officials testified. He moved to have the bill rejected.

But in the end the majority vote of 9 yes approved the bill in second reading, while there were four votes against the bill. Lawmakers who voted against the bill were Sanitoa, Taotasi and Reps. Tapumanaia Galu Satele Jr. and Vailoata E. Amituana’i.

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